For the longest time, I’ve felt that many of our stories in Hotel Business—especially those covering the CEO sessions at major investment conferences in our industry—included the phrase “cautious optimism.” So much so that I remember urging the editorial staff to try to come up with another way to express the sentiment so as not to be redundant.
But, sometimes, you get what you wish for. And today, a new term dominates the conversation—uncertainty. You hear it, read it and might, most impactfully, feel it.
That word is everywhere now—in headlines, analyst notes, boardroom conversations and, perhaps most palpably, in the minds of industry stakeholders. Recent developments, most notably the recent tariff policies, have only deepened that uncertainty, casting a shadow over what some had forecast as a promising year for the hotel industry.
Hotel developers are already feeling the pressure. Tariffs have driven up the price of construction materials like steel and aluminum. These rising costs are leading some companies to postpone or scale back projects, putting long-term competitiveness at risk. And beyond construction, the effects extend into operations. Disrupted supply chains are making it harder to source furnishings and technology at reasonable prices, compounding expenses and delaying openings. And with the cost of goods rising across the board, consumer spending may shrink, directly affecting discretionary spending on travel and leisure.
Then, there’s also the matter of international tourism. Retaliatory measures and travel advisories from foreign governments—especially in response to U.S. tariffs—can certainly impact visitation numbers.
But not all is grim—or final—yet. As I write this, the administration has put a 90-day pause on certain tariffs, which could offer a temporary, yet collective, sigh of relief to the hotel industry, particularly in terms of reduced costs, improved investor confidence and a chance to accelerate stalled projects. It may also improve international sentiment and lead to short-lived boosts in bookings.
But it’s unlikely to drive major change unless followed by a longer-term resolution. Which brings us full circle back to—you guessed it—uncertainty. But it doesn’t have to be pessimism. And there is a wide gap between the two.
Yes, the sweeping tariffs first announced earlier this month still loom, threatening to ripple through the economy and further affect the commercial real estate and hospitality sectors. And, yes, hotel industry analysts warn that if the paused tariffs are reinstated, they will significantly impact construction costs, disrupt supply chains, reduce international tourism and chill investment activity. And that their ultimate scale and duration could make it hard to predict what the implications will be. After all, I have seen numerous analysts and companies fall into “wait-and-see” mode, not willing to issue forecasts at this time, citing a lack of stability in the broader macroeconomic outlook for the U.S. And hoteliers and developers remain wary of committing to long-term plans while the policy outlook remains in flux.
But, pause for a moment, and let’s bring back the old, oft-used standby that once made me shake my head: cautious optimism. Hospitality leaders are doing their best to remain positive. And I love that kind of energy.
This issue features our annual management company report (see page 18). We asked about the outlook for the remainder of 2025, and the consensus seems to be that many hotel leaders are, in the words of one of our executives, “holding onto our optimism despite the ups and downs of the year so far, believing a strong summer travel season will help make up for the lost ground in Q1.” And that, “despite the challenges, [we] are confident that this year will be a year of growth and opportunity.”
Yes, in times of uncertainty, people hold back, almost going into triage mode while trying to navigate the environment. But strategic investment continues. Many companies are using this time to strengthen internal capabilities. Some even capitalize on doing deals during uncertainty, doubling down with the mantra of “this is my time.” Perhaps, as Zack Gharib, president of Red Roof, told me: “There’s a lot out there to transact. It depends on your appetite.”
